Monday 22 February 2021 - 09:30

Saudi Arabia Signs Deal with Lockheed Martin to Enhance Kingdom's Defense, Weapons Manufacturing Capabilities

Story Code : 917718
Saudi Arabia Signs Deal with Lockheed Martin to Enhance Kingdom
SAMI, which is owned by the Saudi state's Public Investment Fund (PIF), will own 51 percent of the venture, The Daily Mail reported.

"The new agreement will develop localized capabilities by transferring technology and knowledge, and by training a Saudi workforce in manufacturing products for, and providing services to, the Saudi armed forces," the statement said.

The announcement follows the US decision last month to declare a temporary freeze on some arms sales to Saudi Arabia and the United Arab Emirates (UAE). 

Saudi is one of the world's largest buyers of foreign arms. 

SAMI was formed in 2017 to develop local defense manufacturing, help cut spending on imports and create more local jobs. The country's economic plan, Vision 2030, aims to localize 50 percent of government military spending by 2030.

Lockheed Martin is currently involved in a project to install a $15 billion missile defense system in Saudi Arabia, part of a $110 billion arms package the administration of former President Donald Trump said it negotiated with the kingdom in 2017.

On Saturday,  Saudi Arabia announced plans to pump $20 billion into producing more of its own weapons and military systems over the next decade.

The country wants to spend at least half of its military budget locally by 2030, the head of the kingdom's military industry regulator stated on Saturday.

"We will be investing in excess of $10bln in the military industry in Saudi Arabia over the next decade and equal amounts on research and development," the governor of the General Authority for Military Industries (GAMI), Ahmed bin Abdulaziz Al-Ohali, told a defence conference in Abu Dhabi.

He also added the kingdom plans to increase military research and development spending from 0.2 percent to around four percent of armaments expenditure by 2030. 

President Joe Biden announced at the end of January that he would pause the implementation of recent Trump-era weapons deals, including the sale of munitions to Saudi Arabia and F-35 fighter jets to the UAE.

Reviews of this sort are typical for a new administration, but Trump's administration was doing deals down to the wire, including one for 50 stealthy F-35 jets made by Lockheed Martin as a side deal to the Abraham accords inked only moments before Biden was sworn into office. 

The F-35 jets are a major component of a $23 billion sale of high-tech armaments from General Atomics, Lockheed and Raytheon Technologies Corp to the United Arab Emirates.

Saudi Arabia signed a deal for 7,500 precision-guided bombs with Raytheon.

Secretary of State Antony Blinken, at his first State Department briefing, expressed support for the Abraham Accords granting recognition to Israel from several countries.

"As we've said, we very much support the Abraham accords," he said, adding, "We think that Israel normalizing relations with its neighbors and other countries in the region is a very positive development and so we applaud them. And we hope that there may be an opportunity to build on them in the months and years ahead."

But he moted he wanted a "full understanding" of any commitments that may have been made, when asked about F-35 jet sales to the United Arab Emirates and arms to Saudi Arabia.

On a post-earnings conference call with investors last month, Raytheon's management announced "with the change in administration, it becomes less likely that we're going to be able to get a license" for a direct commercial sale of offensive weapons worth about $500 million to a Middle East customer. Raytheon did not give the name of the customer.

"The UAE will work closely with the Biden administration on a comprehensive approach to Middle East peace and stability," the UAE Ambassador to the United States, Yousef Al Otaiba, said in a statement posted on the Embassy Twitter account.

"The F-35 package is much more then selling military hardware to a partner, Like the US, it allows the UAE to maintain a strong deterrent to aggression," he continued, adding, "In parallel with new dialogue and security cooperation, it helps to reassure regional partners."

On Friday, it was also announced that the Biden administration would be releasing an intelligence report that concludes Saudi Crown Prince Mohammad bin Salman ordered the 2018 killing of journalist Jamal Khashoggi.

The Washington Post reported Thursday that an unclassified report produced by the Office of the Director of National Intelligence will be made public as early as next week.

"I don’t have an update on the timing," Press Secretary Jen Psaki stated Friday when asked about the coming release.

Khashoggi was writing columns critical of the Saudi government for the paper before he was drugged and dismembered after being lured to the Saudi Consulate in Istanbul, to pick up the paperwork required for his marriage to a Turkish citizen.

The Biden administration has already indicated the president will snub 'MbS', as the crown prince is called, and instead engage with his father, the 85-year-old Saudi King Salman bin Abdulaziz.

Defense Secretary Lloyd Austin did speak with MbS, who as the Saudi Defence Minister is Austin's counterpart, Saudi state media reported Friday.

Biden is returning to "counterpart to counterpart' engagement", the administration said, despite MbS being considered the country's de facto leader.

The president also announced earlier this month that he will end support for Saudi Arabia's controversial war in Yemen.

President Barack Obama began support for Saudi Arabia and Trump ramped it up, but Biden announced during his visit to the State Department that it's ending.

"We're also stepping up our diplomacy to end the war in Yemen, a war which has created a humanitarian and strategic catastrophe," Biden noted.